https://www.taxtmi.com/caselaws?id=788725 Expenditure incurred to settle a liability under a business-related corporate guarantee was held allowable as revenue expenditure under section 37(1) of the Income-tax Act, 1961. The Tribunal applied the principle of commercial expediency and accepted that the liability had crystallised through arbitration and settlement in connection with the assessee's group business interests. It held that the payment flowed from a business decision made to protect commercial interests and resolve litigation, and could not be disallowed merely because the Revenue later questioned the guarantee. The disallowance was deleted. en-us Fri, 13 Mar 2026 00:00:00 +0530 Fri, 27 Mar 2026 08:52:53 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=788725 Expenditure incurred to settle a liability under a business-related corporate guarantee was held allowable as revenue expenditure under section 37(1) of the Income-tax Act, 1961. The Tribunal applied the principle of commercial expediency and accepted that the liability had crystallised through arbitration and settlement in connection with the assessee's group business interests. It held that the payment flowed from a business decision made to protect commercial interests and resolve litigation, and could not be disallowed merely because the Revenue later questioned the guarantee. The disallowance was deleted. Case-Laws Income Tax Fri, 13 Mar 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=788725